An Experiment In Bitcoin Popularity And Security

Cointelegraph has conducted a survey of experts to find out what the best ways to protect Bitcoin wallets are.

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Recently, business strategy and recruitment specialist Tal Newhart, spoke to PRNewswire about a case involving the physical theft of bitcoins perpetrated by a car breaker. In connection to this, Cointelegraph has conducted a survey of experts to find out what the best ways to protect Bitcoin wallets are.

There are different means of digital protection of Bitcoin wallets, such as multi signature, deep cold storage, hardware wallets or the BIP38 protocol. It’s up to to the user, which of these secure measures they choose. For example, security researcher and crypto enthusiast, Ryan Castelucci, prefers to use BIP38-encrypted paper wallets. He told Cointelegraph:

“I use BIP38-encrypted paper wallets with strong passphrases for some of my Bitcoin, kept in a safe”.

He also shared his opinion on hardware wallets and multi-signature:

“Hardware wallets seem like a very good solution for the masses, but I have not personally evaluated any or looked into the different products in detail, so I decline to make any specific recommendation. There are a number of things that are catastrophic if gotten wrong in hardware wallets such as nonce-reuse and poor random key generation.

Multisig is also great - especially for businesses - and many of the highest balance Bitcoin addresses use it these days, but I don't think it's ready for the average Bitcoin user quite yet.”

Another expert, Daniel Diez from Bit2me, on the contrary, prefers to use multi-signature. He sees it as the safest user-friendly option. The other option for him is deep cold storage:

“The best option is Deep cold storage if we talk just about security. The safest user-friendly option in my opinion is multi-signature wallets, as you don´t have to bring your private keys with yourself physically or keep it in a place you think it´s safe but it could be stolen from, but your money is always accessible and if a third party holds your funds, they just can´t use them as they would need the second or third private key”.

Newhart’s experiment

Newhart conducted an experiment in which he wore t-shirts that were printed with Bitcoin wallet QR codes. The first code (public key) was printed on the front of the t-shirt. It also featured the words:

“Bitcoin Research. Please Donate! Ask Me Why!”

The second code (private key) was printed on the back of another t-shirt with “SHA-256.”The public key collected about $65 in donations before the funds were swept from the wallet.

After reading the article on prnewswire.com the aforementioned Ryan Castelucci stated:

“I think this story says a lot more about the popularity of Bitcoin than it does about security. It's not totally clear from this press release, but it sounds like he left something like a paper wallet with the private key visible in the back seat of his car. Anyone who lives in a city knows you don't leave valuable things visible and unattended in your car, and in this case the car effectively wasn't even locked. So, the interesting thing is really that someone knew what it was and how to take it.”

“The shirt thing - I wouldn't really draw any conclusions about morality/ethics from - if I saw that I'd probably assume the Bitcoin in question was deliberately "up for grabs. Certainly interesting though that it took less than five minutes for someone to recognize it and sweep the funds (I believe common Bitcoin apps have tools for this),” Castelucci added.